Mixed Day In The Market, But Dow Jumps To New Intraday High  Image: Bigstock The markets put in a decidedly mixed day yesterday with the Dow up by nearly 1% and making a new all-time intraday high in the process, while the Nasdaq was down by more than -2%. The tech-heavy Nasdaq led the bull market last year, and early this year. But profit taking and a focus on other industries and names has led to a bit of a rotation out of the Nasdaq in the last few weeks. Rising yields brought on by the belief that a rise in inflation could bring about a rise in interest rates has been weighing on stocks. But as I've been saying, I believe that narrative is overblown and misguided. Yes, we all know there's likely to be higher inflation sometime in the future. But Fed Chair Jerome Powell, just the other week, in testimony before Congress, said there were no plans to raise rates in the foreseeable future. And while he acknowledged that he expects inflation to pick up in the coming months, he also expects the increase will be temporary. Again, he's on record expressing more concern over the lack of inflation than inflation rising. So I think the recent volatility continues to be profit taking, stock rotation, and the market gearing up for its next advance higher. And with the Atlanta Fed estimating Q1 GDP to come in at 8.4%, and others forecasting full-year GDP to grow at the fastest pace in 38 years, not to mention the likelihood of another $2 trillion dollars in stimulus money sloshing around, the economy and the market look ready to embark on a record setting move. So make sure you're taking full advantage of it. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
_4140_75x75.jpg)
Post a Comment
Post a Comment